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Many Virginia Beach workers can’t afford rent in the city. New study recommends steps to fix that.

The new report says buying a home is out of reach of many working households in Virginia Beach, which could negatively impact the city’s workforce and business retention. (Photo by Mechelle Hankerson)
The new report says buying a home is out of reach of many working households in Virginia Beach, which could negatively impact the city’s workforce and business retention. (Photo by Mechelle Hankerson)

Many Virginia Beach workers in the city’s most common jobs, like retail cashiers and restaurant workers, don’t earn enough to comfortably live in the city.

That’s one of many findings from the city’s updated housing study, released this week, to help city officials figure out how to tackle the city’s affordable housing shortage.

The study also came with a list of actions the city could take to address affordability - some of which officials have been talking about for years but have yet to implement.

The 113-page report shows that a third of Virginia Beach households pay more than 30% of their income toward housing - a federal measure known as “housing cost burden.”

“There’s thousands of workers living in Virginia Beach who don’t make enough to comfortably afford rent,” said Ruth Hill, the city’s housing director, when she presented preliminary findings to the City Council in January.

Hill said the average registered nurse, for instance, can afford to rent but can’t afford to buy in Virginia Beach. Many working in fast food, retail and restaurants – the kinds of jobs that form the foundation of the city’s tourism industry – can’t cover rent in the city.

Home prices in Virginia Beach have increased 36% since the city’s last housing study in 2016. 

The council commissioned the updated report from the Virginia Center for Housing Research at Virginia Tech and HousingForward Virginia, a housing policy think tank, to help guide the city’s response to the growing affordability crisis that’s plagued the region.

At a retreat last year, the council said addressing affordable housing is among its top priorities.

The new study says, the city’s housing market looked well balanced between demand and supply in 2021, but that the equilibrium was still pricing out low-income households.

“Though the Virginia Beach market is healthy, it’s trending toward tightness and housing shortage. Stakeholders already recount evidence of how the most vulnerable households are being excluded from the market,” the report says.

The study authors say since 2021, the number of cost-burdened households in the city have increased across all income levels.

Renters are more likely to be cost-burdened than homeowners. The study says 35% of the city rents while the other 65% own their home. (That falls between neighboring Norfolk, where 54% of households rent, and Chesapeake, where 27% do.)

And affordability is not evenly distributed across the city. Nearly three-quarters of the housing in Council District 4, which covers much of northwestern Virginia Beach, is affordable for families making the area’s median income for around $84,000 for a 3-person household.

In contrast, just 4% of housing in District 2, which encompasses the largely-rural southern section of the city, is affordable.

What’s next?

The consultants recommended several moves the city can take immediately to tackle housing affordability and access.

Some would take little effort - what the report called “easy wins.” That includes using existing state programs and creating new local ones to directly help residents with housing. Providing down payment assistance to buy a home, temporary rental assistance or relocation assistance would help lower income workers who otherwise can’t afford to live in the city.

But the most consequential recommendations - which will require the biggest lifts - deal with fundamentally changing how the city interacts with development.

The number one recommendation is for Virginia Beach to create a housing trust fund, a dedicated pot of city money that could pay for anything from homeless services to loans to developers to build more housing. Cities and counties around the state and nation are using such funds to grapple with their housing crises and Virginia Beach has been discussing the idea for years.

Councilman Michael Berlucchi has questioned how the city will be able to afford these types of measures given other budget pressures like stormwater needs, new schools and cost overruns on current building projects.

When the recommendations were presented to the board in January, Berlucchi said the city should be working with private developers on market-based solutions, not spending taxpayer funds.

“I’m feeling like every time we come in here there’s a new spending program proposed and no way to pay for it,” he said.

The consultants separately recommend the city use its economic development arm, the Virginia Beach Development Authority, to fund large-scale mixed-income housing projects. The authority typically focuses on developing businesses, but the report argues affordable housing is an increasingly important element of an area’s overall economic and business health.

Councilman Chris Taylor noted many that don’t earn enough to live in Virginia Beach - like cashiers, retail workers and restaurant staff - are the foundation of the city’s largest economic engine: tourism.

“When I look at the individuals who aren’t able to afford, it defines a lot of people who work in the resort area,” Taylor said.

The new report also recommends a campaign to change attitudes around high-density housing. Many projects face objection by neighboring residents who don’t want to see higher density housing built in their area.

Despite decades of study showing that there is no link between housing density and higher crime rates, the majority of Americans still believe crime increases with higher density. The study says overcoming the stigma can help get more residents behind the drive for accessible housing.

The city’s also currently in the process of updating its comprehensive plan, the guidebook to development in the city. Several of the study recommendations include addressing land-use issues to better enable development of affordable housing.

That could include changing the Green Line, the city’s longtime policy of not developing the largely-rural southern section of the city. Residents there have f ought tooth and nail to stop both industrial and denser residential development, but officials including Mayor Bobby Dyer have said new needs for housing could mean reexamining the Green Line.

City Manager Patrick Duhaney said council members should be prepared next month to recommend what they want to explore.

Ryan is WHRO’s business and growth reporter. He joined the newsroom in 2021 after eight years at local newspapers, the Daily Press and Virginian-Pilot. Ryan is a Chesapeake native and still tries to hold his breath every time he drives through the Hampton Roads Bridge-Tunnel.

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